Many employers find themselves having to consider cost-saving measures to ensure business continuity due to the COVID 19 pandemic’s effect on South Africa’s economy.  One of these measures is to retrench employees in terms of section 189 of the Labour Relations Act 66 of 1995.

 

Section 189 regulates the procedure employers must follow when contemplating retrenching their employees. In the event of a large-scale retrenchment, employers must, however, follow the procedure a stipulated in section 189A of the LRA.

 

Section 189A of the LRA applies to employers that employ 50 or more employees and intend to retrench the following number of employees:

  • 10 employees, if the employer employs up to 200 employees;
  • 20 employees, if the employer employs more than 200, but no more than 300 employees;
  • 30 employees, if the employer employs more than 300, but no more than 400 employees;
  • 40 employees, if the employer employs more than 400, but no more than 500 employees;
  • 50 employees, if the employer employs more than 500 employees; or
  • If the number of employees that the employer intends to retrench, together with the employees that have been retrenched in the 12 months prior to issuing the Section 189(3) notice (disclosing all the relevant information and invitation to consult), is equal to or greater than the relevant number specified above.

 

Employers contemplating a large-scale retrenchment should be aware that upon service of the 189(3) notice, a 60-day period must lapse before the employer can issue notices of termination. This consultation period will be discussed in more detail below.

 

Section 189A further makes provision for a facilitation process that takes place with the assistance of a facilitator by:

  • the employer requesting the appointment of a facilitator by the CCMA in its notice in terms of section 189A(3)(a) of the LRA, or
  • consulting parties representing the majority of the employees whom the employer contemplates dismissing have requested facilitation and have notified the CCMA 15 days after the section 189(3) notice was issued, or
  • the parties agree to appoint a facilitator

 

Where parties request CCMA facilitation,  a commissioner is appointed to facilitate consultations and is guided by obligations as contained in the Facilitation Regulations that have been issued by the Minister of Labour in terms of section 189A(6) of the LRA. This includes the obligation to chair the meeting between the parties and to decide on any issue of procedure that arises in the course of the meetings between the parties.

 

The facilitator’s decision regarding the procedure for conducting facilitations, including the date and time, is binding on the parties. The facilitator has a minimum of 60 days, from the date that the section 189(3) notice has been issued to invite employees to consult and includes an obligation to hold at least 4 facilitation meetings. However, in terms of section 189A (4), an agreement can be made between the parties to appoint someone other than a CCMA appointed facilitator. The facilitation process can be conducted privately without having to rely on the CCMA’s resources or availability.

 

After the 60-day consultation period has lapsed and the notice of termination is issued a registered trade union or the employees who have received notice of termination may:

  • give notice of a strike in terms of section 64(1)(b) or (d), or
  • refer a dispute concerning whether there is a fair reason for the dismissal to the Labour Court in terms of section 191 (11)

 

If the parties decide not to appoint a facilitator the consultation period of a minimum of 60 days before a notice of termination can be issued still apply. However, a party may not refer a dispute to a council or the Commission unless a period of 30 days has lapsed from the date on which the notice was given in terms of section 189(3).

 

Once the 60-day period has lapsed and the employer gives notice of termination a registered trade union or the employees may:

  • give notice of a strike in terms of section 64(1)(b) or (d), or
  • refer a dispute concerning whether there is a fair reason for the dismissal to the Labour Court in terms of section 191 (11)

 

We would recommend employers, who are contemplating large-scale retrenchments to request the appointment of a facilitator by the CCMA in terms of section 189A(3)(a) of the LRA.  This would guide them in following a fair process, as contemplated in section 189 of the LRA. However, employers should be aware of the minimum time periods applicable to large-scale retrenchment consultations and should plan accordingly.